17 May 2013


In National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451 the Federal Court has warned academic employers against using sham redundancies to get "rid of an undesired employee".

Justice Gray found that RMIT took unlawful adverse action when it dismissed Professor Judith Bessant who fell out with her head of school - an increasingly common experience. The Court rejected RMIT's argument that the Youth Studies & Sociology professor was made her redundant for financial reasons. The Court fined RMIT $37,000 and ordered it to reinstate Bessant. Gray J did not order damages, saying the judgment would vindicate her.

In finding RMIT breached  Fair Work Act 2009 (Cth) s340(1)(a)(ii)  the Court held that the university had failed to prove that the reasons for Bessant's dismissal did not include those alleged by the NTEU - that she had exercised, or planned to exercise, workplace rights, including by making bullying and intimidation complaints against her new head of school to various people within RMIT and to WorkSafe Victoria.

RMIT maintained that Vice-Chancellor Professor Margaret Gardner made the redundancy decision. She told the court that she was motivated primarily by financial considerations, as the "charismatic" Bessant's area was running at a loss. The Court noted that the Vice-Chancellor indicated that she had "reasons other than those to which she referred explicitly" and that she failed to give explicit evidence that none of the reasons the NTEU alleged were behind the sacking "was operative in her decision". There was an absence of "any clear expression of a connection between the financial deficit in the Youth Work discipline and the choice of Bessant as the one who should be made redundant". "This includes the absence of the expression, or the application, of any criteria by reference to which the making of that choice occurred."

The Court also took into consideration Professor Gardner's "unconvincing insistence" that although Bessant's connections with the Youth Work discipline had been severed, her salary was "irrevocably attached" to its budget. Justice Gray was influenced by the Vice-Chancellor's determination to "ignore her knowledge" of animosity by Professor Hayward (the new head of school) towards Bessant
which was based on Professor Hayward’s views as to Professor Bessant’s conduct, which included the making of various complaints against him, and to attempt to confine herself to the financial case. It is based in part on Professor Gardner’s apparent determination to retain control of the process and to minimise the impact of the defects in that process to which the report of the Redundancy Review Committee drew attention, so that she could ensure that her own decision prevailed.
RMIT was held to have seriously breached its enterprise agreement with the NTEU, which required the university to offer employees whose position had an "uncertain future" the option of participating in a voluntary redeployment process.

In setting penalties, Justice Gray noted that RMIT, particularly the Vice-Chancellor, had displayed no contrition. He commented that
Unless the effect of a penalty is felt, RMIT might again succumb to the temptation to make use of its redundancy processes to rid itself of an employee when it desires to do so for reasons that would be prohibited by the Fair Work Act.
employers must understand that making use of redundancy as a pretext for getting rid of an undesired employee is not an option, if the reasons for wishing to get rid of that employee would be proscribed by the Fair Work Act. Both RMIT and employers generally must understand that obligations entered into pursuant to enterprise bargaining agreements that involve making efforts to avoid redundancies, by the use of such devices as voluntary redeployment programs, are real and substantive obligations, and must be met whenever the occasion for making an employee redundant has become a real prospect.
Importantly Justice Gray said his choice was between putting the academic "back into a situation in which, if she should have dealings with Professor Hayward, those dealings are likely to be unworkable", and forcing the university to "pay out a very large such of money" (estimated at $1.9 million), or "significantly in excess of $1m" even discounting for contingencies. "In the circumstances, it seems to me that the first of these courses is the preferable one."

Ordering Bessant's reinstatement to the position she held immediately before her dismissal took effect (which was a three-year non-teaching position, negotiated in a dispute settlement process after she lodged her complaints) would return her to a research position in a separate building to the head of school, and where should would be "insulated" from directly reporting to him. She would be "able to engage in productive research, which would benefit both her and RMIT".

Justice Gray said that at the end of the three-year non-teaching period, it would not be "outside the range of reasonable management skills to expect that a viable way will be found to ensure that Professor Bessant is able to return to teaching duties, whilst avoiding contact with Professor Hayward so far as possible, to ensure that the School continues to run smoothly".

Justice Gray noted that Bessant was paid a "substantial sum" on her redundancy. Because he was ordering reinstatement with recognition of continuity of employment, he did not propose to order that RMIT pay any further compensation for reputational damage. "By the judgment, she will be vindicated. She will suffer no economic harm arising from any damage to reputation."

RMIT is reportedly considering an appeal and - unsurprisingly - commented "The university takes very seriously its obligations under the Fair Work Act and the university's enterprise agreement".